A Sleeping Giant? ‘TEAM’ And Mumbai Tech Week Look To Propel City’s Startup Fortunes

For most of the past decade, Mumbai has been India’s third-largest startup hub, behind Bengaluru and Delhi NCR. But the Tech Entrepreneurs Association Of Mumbai or TEAM is hoping to change that.

Just over a year after TEAM was formed, the first concrete step has come in the form of Mumbai Tech Week, which kicked off on Sunday (Feb 18) and is set to go on till February 23, 2024.

While the association has been working in the background with the Maharashtra government to propel startups in the the city, the Mumbai Tech Week (MTW) is the first public spectacle and TEAM is hoping this is the first of many such showcases of the city’s startup ecosystem.

Announced in November 2022, TEAM comprises Mumbai’s soonicorn and unicorn startups, venture capital firms as well as listed companies. Mumbai Tech Week was the first showcase of the work that TEAM has done in the past 15 months.

The message at MTW was clear: for over three decades, Mumbai has been relatively stagnant in infrastructure and connectivity development, and in terms of building the network that’s critical for the tech and startup ecosystem, areas where Bengaluru and Delhi NCR have eclipsed the financial capital of India.

But for TEAM, this is not about competing with Bengaluru or Delhi or any other hub, it’s about inclusive growth, which is simply not possible by over-reliance on one or two startup hubs.

Speaking to Inc42 ahead of Mumbai Tech Week, Dream11 founder and CEO Harsh Jain said, “Firstly, it’s not about competition with Bengaluru or Delhi. If we have to make India into a trillion-dollar digital economy, we need Mumbai to rise. Not just Mumbai, we also need Chennai or Hyderabad or Pune because it’s not going to happen with just Bengaluru and Delhi as the startup hubs.”

TEAM: Harnessing Mumbai’s Startup Spirit 

Dream11’s Jain is a key figure in TEAM, along with dozens of other founders of unicorns and soonicorns. TEAM’s members include founders and CEOs such as BookMyShow’s Ashish Hemrajani, CleverTap’s Anand Jain, Haptik’s Aakrit Vaish, Eruditus’ Ashwin Damera, Quantiphi’s Vivek Khemani, Loginext’s Dhruvil Sanghvi, Fino Payment Bank’s Rishi Gupta, Chalo’s Priya Singh among dozens of other startup founders.

Startups such as Zeta, Zepto, Pepperfry, Shaadi.com, Mosaic Wellness, The Souled Store, Dezerv, and GOQii are also part of TEAM, and many of the CXOs at these companies are part of TEAM’s community of function heads. At the moment, the association has ‘microTEAMs’ for CFOs and CHROs where the respective function leads of these companies are enabling colearning, networking and problem-solving for newer startups.

Despite what Jain claimed about not competing with other hubs, there is an element of competition.

For instance, in the days leading up to MTW, several startup founders from Mumbai dove into a debate sparked by Unacademy cofounder and CEO Gaurav Munjal, who claimed, “Mumbai and Delhi cannot become Tech Hubs how much ever people try. Bangalore’s Network Effects are too deep to be broken.”

GOQii founder Vishal Gondal jumped into the debate sparked by Munjal — highlighting the revenue generation of Mumbai-based edtech startups vs those in Delhi and Bengaluru. While the problems at BYJU’S have been well publicised, Gondal mentioned that the likes of upGrad, Eruditus and Lead School are pulling ahead in terms of actual revenue compared to edtech counterparts in Delhi and Bengaluru.

Of course, Gondal was not the only one who waded in. Delhi-based VC fund AdvantEdge’s founder Kunal Khattar also chimed in saying, “We need all 3 cities to be firing on all cylinders. Instead of pulling each other down — let’s benchmark against the OG Silicon Valley.”

In that regard, Khattar’s words are in line with what Dream11’s Jain told us about India needing multiple tech hubs for holistic growth.

Jain’s discussions with some of the startup founders in 2022 revealed that Mumbai has a large share of the unicorns and soonicorns in India.

“We were shocked. We noted at least 50 companies that are unicorns and soonicorns. Essentially companies that were valued at $100 Mn or above. We ourselves did not ever think about it, so how will others. This was when we formed TEAM and invited these very startups to join,” the Dream 11 CEO and IAMAI chairman said.

Other founders in TEAM also believe that startups from Mumbai have flown under the radar for most of their lifetimes and therefore they are able to deliver real value and are not overvalued in terms of revenue multiples. “Most of these startups [from Mumbai] are valued at a conservative multiple, which means they are not overvalued companies but revenue-centric startups. Thus, the probability of these startups turning into unicorns is very high,” LogiNext’s Sanghvi told Inc42 earlier.

Trailing Bengaluru, Delhi NCR

But beyond these claims about value and revenue, it’s hard to overlook the competitive aspect. The fact is that Mumbai attracts fewer deals and less investment than Bengaluru or Delhi, something which has been indicated in Inc42’s annual reports every year for the past half a decade, including our 2023 report.

In 2023, Mumbai saw 160 deals for startups bringing in nearly $1.5 Bn in investments, which pales in comparison to Bengaluru and Delhi. The latter two saw over 240 deals each in 2023, with Bengaluru seeing more than $4.1 Bn in investments, while Delhi drew in $2.6 Bn.

What makes the gap more significant is that on a year-on-year basis, Mumbai saw a 62% drop in investments in 2023, compared to a 51% decline in Delhi NCR and 61% for Bengaluru. The funding inflow for Mumbai startups was already low, and the funding winter of the past two years seems to have had a worse impact on the startups in the coastal city.

“The problem is that Mumbai is so well known for Bollywood, banking, finance that it often overshadows the tech community. We are a tight-knit community and we got tired of talking about it and wanted to take some action,” Jain added.

Now, with the first edition of Mumbai Tech Week, TEAM is hoping that the imbalance will be fixed. But there are obviously some advantages that Bengaluru and Delhi enjoy over Mumbai.

Can Mumbai Change The Imbalance?

The overwhelming feeling on the ground at the MTW this week is that this is just the beginning of Mumbai’s tech story. Maharashtra’s deputy CM Devendra Fadvanis and Minister of State for IT and Electronics Rajeev Chandrasekhar were among the speakers at Mumbai Tech Week, which indicates that TEAM is pushing ahead on all fronts, including policy and creating the right infrastructure for tech companies.

Fadvanis pointed out that in the past few years, Mumbai has seen several infrastructural projects such as a new airport and massive road development to reduce commute time from the suburbs to the major business hubs in the heart of the city. “Many more investments in technology are coming in. There are two or three very big technology companies that are coming to Maharashtra,” the deputy CM added, without revealing the names.

Fadnavis launched ‘The Mumbai Megapolis Metaverse’, which is a digital twin for the city, highlighting the on-ground progress of various projects such as the Atal Setu or the Mumbai Trans Harbour Link, the Coastal Road project and the airport in Navi Mumbai, which is expected to be operational by the end of the year.

The deputy CM said these infrastructure projects promise to catapult Mumbai ahead of other metros in the city in terms of mobility. But these projects do not solve one of the biggest problems for Mumbai i.e the high cost of living when compared to other major metros.

Cost of living and rental costs are higher than ever in Mumbai. Delhi and Bengaluru enjoy a major advantage in this regard, which makes it easier for startups in these hubs to attract the best talent.

Neither Fadvanis nor Jain or any other founder that we spoke to had a clear answer for this problem, long believed to be the biggest hurdle for Mumbai’s tech economy.

The 2023 Knight Frank Affordability Index shows that Mumbai is the most expensive city in India in terms of living affordability. The report said that Mumbai’s home loan EMI to income ratio is a whopping 55%, which means that an average household has to pay more than half of its income on home loan EMIs if they have to get a house on loan. Mumbai is followed by Hyderabad, Delhi and Bengaluru, as per the Knight Frank report.

Even on other metrics related to the cost of living, Mumbai is easily the most expensive city in India, ranking above Delhi and Bengaluru.

This is a major impediment for freshers looking for tech or startup jobs in India, especially after the salary corrections of the past couple of years. Bengaluru and Delhi are more favoured.

Another point in favour of Bengaluru or Delhi NCR is the migration of tech talent from one company to another. Mumbai’s image is not of a tech city, which, as Jain said above, TEAM is hoping to change.

This despite the city being home to IIT-Bombay, which has produced unicorn founders including Bhavish Agarwal of Ola, Ola Electric and Krutrim, NoBroker’s Akhil Gupta, and Groww’s Lalit Keshre. Plus, companies such as Freecharge (founded by CRED’s Kunal Shah), Ola, InMobi, Quikr, Instamojo among others have moved from Mumbai to Bengaluru in the past decade, which had sparked off debates about whether the city is falling behind as a hub for tech startups.

In terms of attracting the right talent, the top two startup hubs seem to have a leg up over Mumbai. Jain told Inc42 that as tech workers realise the depth and breadth of tech startups in Mumbai, the city will become a more attractive destination.

He believes that India’s tech and engineering talent can take advantage of early and growth stage startups in Mumbai such as Mosaic Wellness, LogiNext or The Souled Store and then move to late stage startups such as Billdesk, BookMyShow, Clevertap, Fino or Eruditus for career growth. Plus, Mumbai’s reputation as being a cosmopolitan and safe city goes a long way towards attracting talent, and there are other obvious upsides for startups.

“Mumbai is the only city in India which has a ‘start to finish’ for startups. Startups can get early stage funding here and then leverage private equity firms for late stage and public listings. Of course both the NSE and BSE are based in Mumbai, too. The VC ecosystem has been good with many firms having their offices here, but it definitely needs to be bolstered, because it is a crucial midpoint for startups between the early funding and the IPO.”

Besides Dream11’s Jain, founders such as Haptik’s Vaish and BookMyShow’s Hemrajani and others are the key members of TEAM, and for each of them, this is akin to starting up again, even though TEAM is a non-profit organisation. As Jain says, “It is like building a startup. We are fighting for funding, and burning our own money right now. For me, TEAM is a startup with a lot of family and friends as angels. Except these angel investors are unicorns.”